Sustainability is the ability to be sustained, supported, upheld, or confirmed. A question all companies ask themselves these days is: “Will investing in sustainability pay off within an acceptable amount of time?” Huge companies such as Henkel Corp. and Cybex are putting millions into the construction of eco-friendly factories and products, hoping that it all pays off in the end.
Today many executives, some of whom used to be skeptical about this very matter, are trying to do more with less. While it is for the greater good of our planet, companies realize that it is also beneficial to them as well.
Environmental issues have always been a hard issue to address, especially for CFO’s of major companies, such as Jeff Piccolomini of Henkel Corp., but even a former skeptic such as himself now sees that he has little choice but to embrace this movement.
Almost 80% of major companies in the U.S. now have a sustainability function at minimum and sustainability reports have become much more frequent. However, of all major companies in the U.S., 35% of CFO’s aren’t involved in sustainability, 52% are somewhat involved, and 13% are very involved.
Major companies such as Henkel Corp and Cybex are putting millions of dollars into the construction of eco-friendly factories that implement recycling and use solar power energy units. Their goal is to give off as little pollution as possible. Cybex is putting large amounts of funding into the construction of clean energy sources (turbines in particular).
Interestingly enough environmental issues were one of the top categories for proxy proposals this year. Nearly 50% of shareholder proxy proposals in 2012 relate to environmental and social issues in some way, which is an increase of ten percent from last year. There were several proposals asking companies to improve the making of the liquid used in hydraulic fracturing, a process known as “fracking.” The average shareholder support for this exact proposal reached 21% in 2011 with five resolutions garnering more than 50% of shareholder votes. Ideally taking initiatives is sustainable energy will prove to companies that investing in it is all worth it.
This article was inspired by the case studies and statistics mentioned at the June 2012 issue of CFO Magazine Available at
http://www.cfo.com/article.cfm/14644396
